J&J Opposes Former Talc Supplier's Bankruptcy Plan to Resolve Cancer Claims

By Peg Brickley

Imerys SA is pressing ahead in an effort to get out from under lawsuits over its U.S. mining operation, Imerys Talc America Inc., over the protests of health-care company Johnson & Johnson.

The Imerys talc-mining business, which supplied talc for Johnson's Baby Powder, had been hit with lawsuits claiming the product caused cancer. It was placed into chapter 11 protection in 2019 and sold in 2020 for $223 million, with the proceeds earmarked for a trust to pay cancer claims. It is now trying to win court permission to seek creditor approval of its bankruptcy repayment plan.

Johnson & Johnson, which has denied liability and is fighting the lawsuits, says Imerys Talc's bankruptcy is an improper effort to immunize the mining company's French parent, and make it easier for cancer victims to sue Johnson & Johnson.

"J&J believes in the safety of its products," said Ronit Berkovich, a lawyer for Johnson & Johnson.

Imerys SA didn't respond to a request for comment.

Imerys Talc is putting sale proceeds, insurance policies and funds from settlements into a trust that will pay claims for cancer.

Victims won't get much from Imerys, court papers say. Under the Imerys Talc plan, some ovarian cancer victims can expect to collect only about 5% of the value that has been assigned to their claim, for example.

Johnson & Johnson says the bankruptcy plan allowed cancer victims to set the amount of their damages without opposition, setting a precedent for collecting the rest of the money from Johnson & Johnson.

Advocates of Imerys Talc's chapter 11 plan "have essentially stolen a blank check from the purse of J&J," thanks to the way Imerys Talc set up its bankruptcy trust, Ms. Berkovich said at a hearing Tuesday in the U.S. Bankruptcy Court in Wilmington, Del.

Judge Laurie Selber Silverstein presided Tuesday over the first day of an expected series of hearings on the chapter 11 plan. She is being asked to approve voting materials that will go to creditors. Hearings will continue Friday.

New Brunswick, N.J.-based Johnson & Johnson, known for its health-care and medical-device operations, said last year it would stop selling baby powder made with talc in the U.S. and Canada, but it remains exposed to damage claims over its talc products.

Some of the money for the proposed Imerys Talc trust is coming by way of settlements that were reached in bankruptcy with former owners of the mine, including Cyprus Mines Corp. and Rio Tinto PLC.

Insurers and splinter groups of cancer victims also are objecting to Imerys Talc's chapter 11 plan voting materials, saying the papers have insufficient detail to allow those affected by it to evaluate what it does to their rights.

Assuming Imerys Talc ultimately wins permission to poll creditors on its bankruptcy plan, it would have to return to court to get a judge's approval of the plan.

Write to Peg Brickley at peg.brickley@wsj.com

(END) Dow Jones Newswires

January 12, 2021 20:20 ET (01:20 GMT)

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